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Finance consults on draft tax legislation on bequests to Canadian charities and trust taxation

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Published September 1, 2014by Mark Blumberg

Following up on the 2014 Budget, Finance has released draft tax legislation for consultation. The changes with respect to bequests to registered charities are from Budget 2014, and will allow some greater flexibility for claiming the charitable donations against either the estate or a trust. This bequest proposal has generally been welcomed. It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount of gift left to charity.

The changes will also affect trusts and estates in that the graduated rate of taxation will be eliminated except for when an individual is eligible for the Disability Tax Credit. The graduated rates for testamentary trusts had saved wealthier families huge amounts of taxes and this will now be removed. Finance is asking for comments by September 28, 2014. Here are the entire proposals as well as explanatory notes.

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